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John Donahoe, CEO of eBay, Delivers Hallene Lecture

March 3, 2013

by Amy Hatch

John Donahoe is a Midwesterner at heart.

That’s what the chief executive officer of eBay told a rapt audience of students in the Deloitte Auditorium on a recent Thursday afternoon, when he visited the College of Business at the University of Illinois.

Donahoe and his colleague, eBay’s Dean Nelson, vice president, global foundation services, kicked off the energetic session by tossing eBay T-shirts into the enthusiastic audience, prior to a dynamic discussion about the current state of “connected commerce” and what the future might look like sooner rather than later.

Building Enduring Companies

Donahoe, who grew up outside of Chicago, fondly recalled attending a high-school golf tournament at UIUC before sharing how his “Midwestern” values have informed his career and influenced his decision to make the move to eBay from Bain & Company, Inc. in 2008.

“My father was a loyal person who worked at the same company for 40 years, and I have similar values,” he said. “One day, [former eBay CEO] Meg Whitman called, and she said, ‘John, I don’t have a successor at eBay. Come and join eBay, work with me and then I want you to succeed me.'”

At that time, eBay was a hot Silicon Valley company, Donahoe recalled.

“It was the darling of pop culture, the media and Wall Street, and here was Meg saying to me, ‘Come and join us,'” he said. “And I’ll be honest, I wasn’t interested. The Midwesterner in me is more of a ‘built-to-last’ person. I’ve never been hot in my life, and so I initially said no.”

However, when Donahoe met with the company’s founder, Pierre Omidyar, he was surprised to find his core values reflected back at him.

“I expected someone brash and arrogant, and I found the most unassuming guy I’ve ever met. All he did was talk about eBay’s core purpose and values,” said Donahoe. “What attracted me to eBay is was the desire to build a great, enduring company, and being great is better than being hot.”

On Being Great

To ensure eBay’s future as an enduring company, Donahoe frequently meets with other leaders of stalwart organizations and he has learned the following:

We don’t find greatness in ourselves. Instead, what do customers and employee say about the company? What does the community say?

It is during hard times that companies build character. When we face, confront and overcome adversity, we build the character to enable greatness.

In order to be great, a company’s purpose, values and behavior must be strong, consistent and relevant.

“Five years ago we started a major turnaround,” Donahoe said. “We made a radical, significant change to our user experience and it was really hard. We were really unpopular with the media and on Wall Street and it wasn’t fun, but we were doing what we knew was right.”

And it was through that experience, he added, that the company built the character and strength of purpose to be a great, enduring institution for years to come: “Now we are a company with positive momentum, and the only thing I know is that there is more adversity down the road-but we are ready for it.”

Change is All Around Us

Part of being an enduring company is being able to manage, embrace and drive change, Donahoe told students. eBay weathered a tough streak when it was thought the company might fade away like so many other Silicon Valley fads, but in fact the organization was able to fight back and is now thought of as one of the major innovators in the space of “connected commerce.”

Connected commerce is a new way of looking at the process of buying and selling goods, and Donahoe’s company is on the leading edge.

“We are at one of the most interesting periods of time in history when technology is enabling fundamental changes in consumer behavior on a global level,” he said. “I believe we will see more change in how consumers shop and pay for goods in the next three years than we have in the last 20.”

Holding his smart phone aloft, Donahoe told students that mobile technology is going to drive the bulk of those changes.

“Smart phones have taken the ‘e’ out of e-commerce,” he said. “They will have a fundamental impact in changing how we shop.”

This profound change of “having a mall in your pocket” is also forcing retailers into a mode of evolution, he added, and pointed to the audience as the next wave of innovators.

“The pace of change is only accelerating,” Donahoe pointed out. “For those of you just coming out of college and those of you who are in college now, change has never been faster. Your generation has grown up with tools that didn’t exist. Young people are able to imagine what can happen, because you don’t know any better.”

Career Advice

Looking back over the 32 years since he himself graduated from college, Donahoe offered some sound career advice to students: Be a lifelong learner, understand how to collaborate, and know and hide your own weaknesses.

“Don’t be afraid to learn,” he said. “The best people never stop learning, and are in fact ferocious in their desire to learn. Ask questions, don’t give answers-and don’t feel like you always have to know all the answers.”

As well as maintaining an avid curiosity, Donahoe advises students to hone both their ability to understand all sides of the issue and to develop and trust their own instincts and judgment.

“Understand both sides before you make a decision,” he said. “Maintain your perspective. It’s never near as good as it seems on the good days, and it’s not nearly as bad as it seems on the bad days.”

The best business leaders, he added, are able to balance their head and their heart when it comes time to move decisively. They are able to look outside of themselves, and then back inward to make the best choices for their organization.

“Very few people understand a business from an integrated perspective,” Donahoe said. “And get to the heart quickly-where is the leverage, how can I get to it fast.”

The ability to collaborate is the ideal quality for building a successful career, Donahoe suggested: “Very few things in life and business can you do on your own. Almost all great businesses, like great sports teams, require lots of people working together. I get asked all the time about the notion of leadership, and I don’t see it that way. What leadership is about is creating ‘followship.'”

Last but not least, Donahoe reminded students that knowing themselves and knowing when to give credit to others are the cornerstones of success.

“Have good self-awareness and don’t be afraid to hide your weaknesses,” he said. “Surround yourself with people who are good at what you aren’t good at. Last, the best leaders give the credit to others

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